Financial Information

To Our Shareholders, Customers, and Friends:

With the many unique happenings of the past 12 months,
2017 is a year that will stand out for quite some time.
Particular notable events occurring last year include a massive
restructuring of the tax laws, record stock prices, and
developments in the banking regulatory environment. Comparative
data for the years 2017 and 2016, as prepared by our external
auditor, Crowe Horwath LLP, is provided for your review.

The Tax Cuts and Jobs Act (TCJA)
was signed into law by President Trump on December 22, 2017.
Interestingly, this tax law significantly raised the amount
of income taxes the bank paid in 2017 by $517,903. In
addition, the Tax Cuts and Jobs Act adversely affected the
deferred taxes, which are detailed on page 22 of the report.
Moving forward, the bank will benefit greatly from a tax
rate of 21% effective in 2018, as compared to the previous
rate of 34%. When these major tax changes are taken
into account, the bank’s net income for 2017 was $3,100,121.
Year-end total assets were at an all-time high of
$332,240,345. This is an increase of $7,033,137 or
2.16%. Shareholder equity of $50,303,383 exceeded
$50,000,000 for the first time.

Our economy in Southeastern
Illinois remains steady. One strength was a rebound in
the production, transportation, and price of coal, along
with the continued upward trend of crude oil prices.
Fortunately, our farmers had excellent yields, except for a
few isolated areas to the northwest of our market area. Not
only were there record crops for many, it was a year in
which positive corn and soybean yields were attained on both
bottomland and upland soils. However, the large U.S.
and world grain inventories limit the rallies associated
with grain prices. Local farmland values have been
fairly consistent, with only slight declines being observed.

We believe the pattern of interest
rate increases by the Federal Reserve Board will continue.
Maintaining our net interest income and obtaining deposits will
still be a challenge in 2018.

We mourned the passing of our
friend and Bank Director, Dwain O. Massie, in November.
Dwain lived a remarkable life and was an inspiration to
everyone. Dwain had over seventy years of service as a bank
employee and director. He will be greatly missed.

In 2017, we recognized the retirement of three long-time employees:
Jerald Hubble, Beverly Bass, and Diana Campbell. Jerald and Beverly joined us in 2004
when we acquired the Mt. Erie Branch. Diana began employment with us as Branch Manager
at the opening of the Crossville Branch in 2007. Altogether, they had over 75 years of
combined banking experience.

We thank our employees and our
Board of Directors for their hard work and contributions to
the success of the bank. One of our staff members,
Cathy Neikirk, reached her 40th year of
employment. We appreciate her dedication in achieving
this milestone.

The city of Albion will
commemorate its 200th year anniversary in 2018.
Please join us for a special celebration of this momentous
occasion on October 12-14. We are proud to have been
able to provide financial services in this area for the past
77 years, and we look forward to a prosperous future for all
of the communities we serve. Thank you for your
support.